Pod coffee machines, Thermomix eat into Sunbeam kitchen

Are coffee pods killing the kettle? Is MasterChef mauling the Mixmaster? 

The owner of the struggling kitchen brand Sunbeam, maker of the Mixmaster,  seems to think so.

Sunbeam’s parent, GUD Holdings, told the market on Friday
that the Nespresso pod coffee machine and the popular Thermomix
appliance are eating into its sales and that it needs to innovate to
keep up.

The brand, which sells everything from ice-cream makers to
sous vide machines, has been a fixture of Australian kitchens since the
Mixmaster was launched in 1948.

Sunbeam is being hurt by difficult trading conditions,  that
were being caused by a decline in the small appliances’ market and a
lack of innovative products, GUD said.

In its full-year report, GUD identified the pod coffee machine as one new product that was depressing sales of its brands.

All-in-one applicances like the Thermomix, a fixture of the television program Masterchef, were also biting into its market share, the company said.

GUD Holdings managing director Jonathan Ling said Sunbeam had
struggled with soft demand around its two peak selling periods,
Christmas and Mother’s Day.

The company is focusing strongly on innovation, particularly
in the appliance market at Sunbeam, which has recently launched about 50
new products.

Sunbeam’s so-called innovation hub has identified
breakthrough products that could be launched next year, the company
said. “As we’ve said for the last year, a focus on innovative new
products is where we need to go to,” Mr Ling said.

GUD reported a full-year net profit after tax of $17.7 million, down by 43.8 per cent from $31.5 million in the previous year.

Underlying earnings before interest and tax (EBIT) fell by 13
per cent to $49 million, with the second half of the year showing an
upswing due to an improvement by the company’s storage brand, Dexion.

Sunbeam was the company’s worst performer. Sales tumbled by 9
per cent, translating to an 83 per cent dive in underlying EBIT for the
label to $1.5 million.

CitiBank equities analysts said Sunbeam needed to focus on
product development and create category-killerproducts to recapture lost
market share.

GUD’s other major segment Dexion reported a 2 per cent dip in
sales to $199.5 million and took a 51 per cent hit to its underlying
EBIT in 2014.

The company’s share price plunged by 8 per cent and was trading at $6.60 late on  Friday. 

The company said a major restructure of manufacturing
facilities at Dexion contributed to $13.3 million, after tax, of
restructuring and impairment costs.

A bright spot was GUD’s automotive business, comprising the
Ryco, Wesfil and Goss brands. Underlying EBIT was up by 8 per cent to
$30.3 million on a 9 per cent rise in sales to $95.4 million.

Mr Ling said he expected an improved financial performance
throughout the company in the next financial year, with positive
contributions by Dexion and Sunbeam.  

“Our view is we’ve hit the bottom and we are expecting
revenue to start to grow again in the lead-up to Christmas 2014,” he
said.